Oooh ooh! I would use a nylon twill type of fabric-- you need something that will either repel or wick water, not absorb it. And I think I'd sandwich that styrofoam sheeting used for packaging in between two pieces of it.

For a pattern-- why not use a traditional brown paper bag? You'd just need one big rectangle for the sides, which you'd sew at the ends to make a circle-- the sides of the bag-- and a rectangle or square for the bottom. Does that make sense?

What about using quilt batting or something to that effect? Do you think It would insulate something cold as well as it would something warm? I would also put vinyl on the inside of it, like the picnic table plaid stuff they sell on the giant rollers at fabric stores!